The government will commit an increased £7.6billion a year to green power generation under the new Energy Bill set to be introduced next week.

An estimated £110billion is needed over the next ten years to overhaul the UK’s ageing electricity infrastructure, with costs to the consumer set to triple from the current £2.35billion annual outlay.

Environmentalists joined opposition MPs in criticising the announced changes, citing the government’s failure to commit to concrete plans to cut harmful carbon emissions by 2030.

Meanwhile Labour described it as ‘humiliating failure by the Liberal Democrats’.

Mr Davey today said he had reached a ‘durable agreement’ with chancellor George Osborne and the coalition in his efforts to introduce the radical electricity market overhaul.

‘They will allow us to meet our legally-binding carbon reduction and renewable energy obligations and will bring on the investment required to keep the lights on and bills affordable for consumers,’ he said.

In agreement: Chancellor George Osborne (Picture: Reuters)

The Liberal Democrat MP described the long-running talks as a ‘good negotiation’ leading to the two coalition parties ‘coming together [to] deliver the biggest boost to green energy’.

However John Sauven, executive director of Greenpeace, said the bill was ‘a blatant assault on the greening of the UK economy that leaves consumers vulnerable to rising gas prices, and sends billions of pounds of clean-tech investment to our economic rivals’.

In response, Mr Davey dismissed fears over a hike in prices, saying: ‘The impact from supporting green policy is only 2 per cent on people’s bills at the moment.

‘That will grow and by 2020 it will be about 7 per cent. We are talking about under £100 in 2020.’

Shadow energy and climate change secretary Caroline Flint added: ‘It is outrageous that on the day Ed Miliband committed to a tough cut in Britain’s carbon levels by 2030, George Osborne and Ed Davey abandoned their target.

‘This is a humiliating failure by the Liberal Democrats and a betrayal of David Cameron’s promise to be the greenest government ever.’